(MENAFN- Kuwait News Agency (KUNA)) UK Government borrowing remained unchanged last month, official figures revealed Friday, amid growing expectations that the Chancellor, Finance secretary, will abandon his deadline to start lowering UK debt within three years.
Public sector net borrowing, excluding financial interventions such as bank bailouts, was 14.4 billion pounds in August, equal to borrowing in the same month last year.
The stubborn figures will pile pressure on George Osborne, who is widely expected to announce in his autumn statement in December that the Government will be unable to start bringing down debt as a percentage of GDP in 2015/16, analysts said.
The likelihood of the Chancellor dropping this target was heightened last night after Bank of England Governor Sir Mervyn King effectively endorsed such a move - on condition the global economy was growing slowly, they noted.
Public sector net borrowing in the financial year to date was 59 billion, the ONS said, excluding a one-off 28 billion pounds boost from the transfer of the Royal Mail pension fund into Treasury ownership.
The Chancellor wants to record borrowing for the full year 2012/2013 to 120 billion pounds, excluding the Royal Mail pension effect, compared with a downwardly revised 119.3 billion pounds in the previous year.
But Osborne's chances of hitting this target are looking increasingly slim, according to most economists, as the ongoing recession impacts on tax receipts and Government spending.
If the Chancellor sticks to the debt target, he will be faced with announcing potentially large tax rises and further spending cuts in his autumn statement.
But Sir Mervyn, when asked last night about the supplementary rule on debt, indicated that he would not complain if the target was missed.
He said: "If it's because the world economy has grown slowly, so we have in turn grown slowly, then that would be acceptable.
It would not be acceptable if we have no real excuse." Within the August figures, the picture was much the same as previous months, with Government spending outstripping tax receipts as income tax falls and spending on social benefits rises.
Total tax receipts were 1.8% higher at 41.4 billion pounds while total expenditure increased by 2.5% to 52.5 billion pounds.
Income tax dropped 1% in August to 11.5 billion pounds, while social benefits were 4.9% higher at 16.1 billion pounds.
Public sector debt was 1 trillion pounds at the end of August, equal to 66.
1% of GDP, compared with 955 billion pounds, or 62.7% of GDP in August last year.
A Treasury spokesman said: "Borrowing figures for August this year are better than the markets expected and, for the first month this financial year, in line with those of last year.
"This underlines why, at such an uncertain time, we should not second guess what the Office for Budget Responsibility will forecast later in the year, by which time it will have further months' data to draw on."
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